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HMRC internal manual

Employment Income Manual

Vouchers and credit-tokens: outline of the special rules: continued

Part 3 Chapter 4, Sections 362 and 363 ITEPA 2003

This page summarises circumstances when there are no earnings chargeable on the employee. This is even though the employee has used a voucher or token provided by reason of the employment to obtain goods or services.

For a description of the points to consider in a case involving vouchers or credit-tokens see EIM16030.

For a description of what is caught by the legislation see EIM16020.

Having obtained money, goods or services by means of a voucher or credit-token supplied by reason of his or her employment, the employee can only escape a charge to tax if:

  • the employee reimburses the provider for those costs, or
  • the cost of both the voucher or credit-token and the items obtained by its use was incurred in such circumstances that, had the employee incurred it, there would be a deduction for it under Part 5 Chapter 2 or 5 ITEPA 2003, or
  • the terms of Section 270 ITEPA 2003, relating to small gifts of goods by third parties, are satisfied, see EIM01450, or
  • there is a statutory exemption, see EIM16057, EIM16070, EIM16100, EIM16105 and EIM50100.

Thus if an employer supplies an employee with a credit card only to obtain necessary items for use by the employee in the performance of the duties and the employer pays the bills, there are no chargeable earnings.